An Extraordinary General Meeting (EGM) is an urgent meeting called to address pressing company issues or emergencies. These matters require the immediate attention of the board, shareholders and senior company executives.
An EGM is also referred to as a special general meeting or an emergency general meeting. It can be called by the board of directors or shareholders who collectively hold at least 10% of the company’s voting shares.
Reasons for calling an EGM
EGMs offer a means to deal with pressing matters that arise between AGMs. An EGM can be called at any time and date to address the following:
- The removal of an executive director or a key manager due to misconduct
- Approving critical decisions or actions that cannot be delayed until the next scheduled AGM
- Addressing urgent matters such as changes to the company’s articles of association, mergers, acquisitions or major capital restructuring
- Seeking shareholder approval on matters that significantly impact the company’s direction or structure
- To discuss and vote on proposed changes to the company’s corporate governance policies
- A legal matter that requires the shareholders’ immediate attention
Key elements of an EGM
Here are the key elements of an EGM:
Resolutions and proposals
Specific resolutions or formal proposals to be voted on by shareholders are brought to the table. These can include any changes to the company’s byelaws, approval of substantial transactions or the removal of directors.
The meeting members present the reasons and implications of urgent matters that require shareholder approval. These presentations offer insight into the context and specific consequences of the proposed actions.
An EGM is designed to efficiently address critical issues pending shareholder approval. As such, informed discussions prioritising the matter at hand form a key part of the meeting.
Shareholders can vote on the resolutions and proposals brought forth in the EGM. A quorum, depending on the company byelaws, must be established beforehand. The voting can be conducted in person, by proxy or electronically if allowed in the byelaws.
Preparation and notice for an extraordinary general meeting
Before calling an EGM, the board of directors must finalise the agenda, including resolutions to be discussed during the meeting. The meeting members must be notified of these resolutions and their importance in advance. This allows them to conduct research and contribute to informed decision-making. Decide on a suitable date, time and location to hold the meeting, allowing for the best possible attendance.
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